The most notable cost-related changes in the health care system over the past decade have attacked some of the misaligned incentives in the system, and those efforts have helped slow health-care cost growth in recent years.
The most notable cost-related changes in the health care system over the past decade have attacked some of the misaligned incentives in the system, and those efforts have helped slow health-care cost growth in recent years.
The one area primarily untouched by those changes, prescription drug costs, is also the one area where inflation is growing rapidly, with 12.2 percent growth in 2014. Yet Josh Gordon, policy director for The Concord Coalition, notes an apparent effort in Congress to thwart experiments designed to test how to best change the incentives physicians face in administering prescription drugs.
Presently, physicians who administer drugs in their offices under Medicare Part B are paid 6 percent of the drugs’ average sale prices. In a new blog post, Gordon says this clearly creates a perverse incentive: physicians benefit monetarily from prescribing more expensive — but not necessarily more effective — drugs.
The Centers for Medicare and Medicaid Services (CMS) recently announced some pilot projects following recommendations from the non-partisan Medicare Payment Advisory Commission to test the impact of reducing the piece of physician payments directly tied to drug prices.
These projects are pretty straightforward attempts to fix irrational incentives. If Congress opposes even testing such such solutions, that does not bode well for the more difficult choices it will have to make to control drug spending.
